Thursday, October 3, 2013

France’s parliament has passed a law preventing internet booksellers from offering free delivery to customers, in an attempt to protect the country’s struggling bookshops from the growing dominance of US online retailer Amazon.

The report highlights a risk that Amazon faces - its cost leadership in France is seen as a threat against which local bookshops need to be protected through legislation. Rather than be seen as an isolated incident, this perhaps is an indication that Amazon has reached a size where its action will attract law makers’ attention.

3 comments:

The success of online shop would be sad story for offline retailers. But for the publishers and book writers, online retailing is chance to increase demand both from domestic consumers and foreign consumers. Putting price floor will disturb this new demand creation. Which side is the parliament on in preservation of French culture, offline retailers ? or book writers ?

It will be interesting to see how France fairs in the global economy as their protectionist and anti-competition legislation continues to burden business. In a similar incident Google was fined more than a half of a million dollars for giving Google Maps away for free. From an economics of information perspective, the value that Google is able to capture on other sides of the maps platform likely still outweighs this fine. As France realizes that these penalties are unlikely to deter, will penalties increase or will they find other ways to deter large corporations or encourage small, local ones.

There is an element of "Americans are taking over" hype/phobia to these actions in Europe, prominently in France where there is more of a degree of protectionism of self and as well as the HIPPO (lobbies) at the democratic level influencing the legislation.